Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

This legislation totally fails to deliver on the coalition's pre-election promise to 'ensure better infrastructure planning, more rigorous and transparent assessments of taxpayer-funded projects'. The Liberal government has inexplicably and disgracefully ruled out funding for urban public transport projects such as the Melbourne Metro Rail Capacity Project, Brisbane Cross City Rail, Perth light rail and airport link and the Tonsley Park rail upgrade in Adelaide. The changes before the House will allow public transport to be excluded with the stroke of the minister's pen. These changes will harm business confidence, drag down productivity benefits and reinstate a process where taxpayers' money is wasted on lesser priority projects. It facilitates closed-door deal making and tax break deals that weaken confidence in merit assessment.

Labor has a strong record on infrastructure funding. On any objective measure, the far-reaching reforms we implemented and the unprecedented capital works program we initiated did make a real and substantial difference. Australia went to second place on the international league table which ranks OECD countries by the scale of the investment they are making in their fixed capital. When we left office, our nation was investing more than any other major advanced economy with the exception of South Korea. Total annual investment in our nation's roads, ports, railways, energy generators, water supply facilities and telecommunication networks hit a record $58.5 billion in 2011-12, equivalent to four per cent of GDP—the biggest share of national income since at least 1986-87. Annual infrastructure spending by the public sector alone was greater than two per cent of GDP for the first time in a quarter of a century—that is, since the last time there was a Labor government in Canberra. But this bill returns us to the bad old days of political, rather than merits based, decision making about infrastructure, and the days of the regional rorts that marred the Howard government.

If we were serious about merit based infrastructure planning then the East West Link—the freeway through Royal Park in Melbourne—would not proceed. Concern with the lack of due diligence behind the decision to proceed with the Royal Park freeway is growing. This is because it is acknowledged in the transport industry that adding road capacity through the freeway will bring in more vehicles more quickly and actually worsen congestion on Hoddle Street, Flemington Road, the Tullamarine Freeway and other roads that are currently at capacity. Industry assessments are that the freeway will not fix congestion because, as the 2008 Eddington report identified, less than 20 per cent of all vehicles travel through from the east to the west, while 80 per cent of all vehicles exit to inner Melbourne areas to access jobs and services. They will continue to do so, despite the Royal Park freeway and, with more vehicles reaching exits more quickly, congestion will in fact be worse.

There is no strategic justification for the project. There is nothing to allay concerns relating to the 2008 Eddington report's identification of a negative cost-benefit ratio for the project, with 50 cents lost on every dollar spent. The east-west road link, on this basis, would fail the critical productivity test and would actually be negative for state product and GDP. When a poor public project is selected, the community loses twice: first, because scarce capital is misapplied, and, second, because taxes and funds raised to finance that project distort behaviour in ways which have a significant cost. Further, the use of scarce capital for the Royal Park freeway will crowd out other worthwhile projects. As The Age commentator Kenneth Davidson has accurately pointed out in relation to this project:

It will cripple the state's fiscal position for many years through massive payments to the public-private partnership consortium that will finance it.

The financial burden on the Victorian taxpayer will be so big that it will 'crowd out' the state's core responsibilities for funding schools, hospitals, rail transport and even other roads for at least a generation.

We need to remember that the Eddington report identified that, for every dollar invested in the project, Victoria will see a return of only 50 cents.

Tolls on the planned freeway would have to be three times the current cost of an average trip on CityLink for the project's investors to make a profit, according to an international study led by University College London, which analysed numerous transport mega-projects, including Australian road and rail projects. It found that, for investors to get a return on the freeway, motorists would have to be charged a minimum $10.50 to use it. The authors of the study stated

At a projected construction cost of just under three times the cost of CityLink, the tolls for the tunnel will need to be at least three times the cost of an average trip on CityLink if investors are to make a similar return.

And:

Experience in Sydney has shown that motorists unfamiliar with paying tolls, such as those along the Eastern Freeway, will resist tolls this high and seek alternate routes.

This would be prohibitive for motorists and demonstrates just how unrealistic this project is. It is a white elephant. The study's authors predict that the probability that many motorists would baulk at such a steep toll and take other roads instead, such as Hoddle Street, will put pressure on the government to toll the Eastern Freeway.

I agree with Kenneth Davidson when he says:

The contempt shown at every step of the way for due process suggests that the financial establishment which benefits from these projects - and the politicians who serve those interests - are well aware that these breathtaking examples of sophisticated financial engineering can't stand the light of day.

This extends to the Federal Liberal government, which has promised $1.5 billion for the project despite the absence of a business case. Infrastructure Australia confirmed recently in Senate estimates that the Victorian government is yet to provide its full business case for the east-west road link despite the Commonwealth government's funding commitment. It also confirmed that the new government had not asked it for advice on the east-west link. The Victorian and federal governments want to proceed with the Royal Park freeway without any proper public scrutiny. So much for transparency! It is extraordinary that the government's key infrastructure advisor has yet to see the full business case for this project, which begs the question: is the government keeping the business case secret because the economics of the project are seriously flawed? I believe that it is.

The freeway would be delivered as a public-private partnership availability model. This means a third party would build and manage the toll road, but toll revenue risk would be borne by the state government. This means that, if the road fails to meet optimistic traffic projections, my fellow Victorians will foot the bill. In recent years, a number of high-profile PPP projects have generated large financial losses. These include $800 million on Sydney's railway AirportLink, $100 million on the Brisbane Airtrain, $1 billion on the Lane Cove tunnel, $300 million on the Sydney cross-city tunnels and an estimated $770 million on Melbourne's EastLink. How can the government legitimately withhold the business case from the public when the public bears a significant financial risk? The east-west link demonstrates a fundamental problem of transparency and accountability in public-private partnerships.

The Age reporter Josh Gordon has revealed astonishing research prepared for the Linking Melbourne Authority which shows thousands of motorists will experience more congestion, not less, with this freeway. Traffic at the top of Hoddle Street near the Eastern Freeway, already chock-a-block, will rise by up to 35 per cent during the morning peak by 2021 due to this project. Morning peak traffic on Manningham Road in Bulleen is tipped to increase by a quarter by 2021. Morning peak traffic on Earl Street, Kew, is expected to surge by up to 40 per cent once the freeway is completed. It is bizarre—billions of dollars spent to achieve more congestion.

The money for the Royal Park freeway would be better spent on improving public transport infrastructure, frequency and reliability. This money should go towards building a railway line to Doncaster along the Eastern Freeway, building a rail link to Monash University and extending the Epping rail line. The east-west link ranks behind other planned transport projects, including the Melbourne metro rail tunnel, which has been assessed by Infrastructure Australia as economically beneficial and ready to proceed. In fact, the Melbourne metro rail project received $40 million federally on the recommendation of Infrastructure Australia that it was in the highest priority category. This project has been assessed as being able to add travel capacity equivalent to 100 lanes of freeway. The expert and independent adviser rejected the Royal Park freeway on economic grounds and has recommended that $3 billion be made available to begin building the metro rail tunnel. The Victorian government and the Commonwealth government should act on this advice.

The Doncaster rail project would carry an estimated 100,000 passengers per day and take 800 cars per train off congested roads. This equates to each train removing a 3.7-kilometre lane of traffic. Doncaster rail could be built at a fraction of the cost of the tunnel. The project, carrying 100,000 passengers per day, would not only enable a 20-minute journey to the CBD but would substantially ease vehicle congestion on the Eastern Freeway, Hoddle Street and other arterials north and east of the CBD. I commend the work of the Metropolitan Transport Forum and Yarra Councillor Jackie Fristacky, who have put forward useful ideas for public transport infrastructure in Melbourne.

Apart from Doncaster and the metro rail, other needed projects which could be funded in lieu are Rowville, Mernda and airport rail lines; the Dandenong rail corridor upgrade; removal of at least 20 key level crossings; and system-wide signal upgrades to increase capacity on all rail lines. The decision to proceed with a freeway through Royal Park instead of investing in vital public transport is a critical issue for Melbourne, where rail services nowadays effectively reach only 30 per cent of Melbourne's population.

Another freeway will create more carbon pollution, increase traffic congestion, and destroy local amenity for the communities that will be affected by the tunnel's construction. Community opposition to the freeway reflects concerns around the demolition of homes, the impact on Melbourne Zoo, reduction in parkland, the cost of tolls and the increases in traffic congestion along adjacent roads. Melbourne Zoo is seeking assurances that the east-west link tunnel construction will not have an impact on the animals. The western entrance of the tunnel will be just a few hundred metres from the zoo. Concerns centre on ground vibrations and loud noises during the project's construction. University of Melbourne zoology professor Mark Elgar has said that vibrations and noise from drilling work could increase the stress levels of zoo animals. Melbourne Zoo director Kevin Tanner has said that the zoo has been in contact with zoos around the world to see how they have been affected by similar projects.

One of the greatest challenges facing the 21st century is the challenge of climate change. We cannot tackle climate change by building more roads. By all means, let us build transport infrastructure—let us be a nation of builders—but let it be public transport infrastructure. We cannot build our way out of congestion. We have been trying it for years and it does not work.

For years we have been told that one more freeway would solve Melbourne's traffic congestion problems. I used to believe that—I supported CityLink, I supported EastLink, I supported the metropolitan ring road and I supported the Craigieburn Bypass—but it never works. Many studies around the world have shown, freeways generate new traffic and new trips, so it would be better to put public money into public transport. This will do more to help traffic congestion, more to contain carbon emissions, and more to help people who do not drive cars—for example, younger people, older people and people with disabilities.

The changes the coalition is seeking today will reduce transparency and allow a return to the days when a minister can skew process towards pet projects that have less merit, over more important projects that deliver real productivity gains. I strongly support the remarks of the shadow minister in expressing his opposition, and Labor's opposition, to this legislation.

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